MANILA, Philippines - Energy Development Corp. (EDC), the renewable energy development arm of the Lopezes, will focus on its local operations in the next two years before expanding abroad, a ranking official said over the weekend.
First Gen Corp. president and CEO Federico Lopez said they may intensify their expansion in the international market in two years time. First Gen owns majority stake in EDC.
“As far as international expansion is concerned, we give it like a two-year timeframe because we see it is the next two years where there is a lot of revving up that we need to do at EDC,” he said.
Lopez said they have to prepare EDC before expanding abroad.
“It (EDC) came from decades of being under the public sector so there’s a lot of governance changes – management procedure and process changes – that we have to put at EDC.
He said they would instead focus on investments in the local market. “You’d see us capitalizing in a lot of the local opportunities first such as the privatization of the geothermal power plants that we’re already supplying steam to,” he said.
EDC earlier signified its interest to bid for the geothermal assets of the National Power Corp. (Napocor) such as Palinpinon and Tongonan.
According to Lopez, they would also be dealing more on improving their existing facilities.
“We have a number of expansion projects on our existing fields and then after that by two years we will probably be ready to start looking at international opportunities and expansion as well,” he added.
On the expansion plan in the Indonesian market, EDC deputy president and chief operating officer Ricky Tantoco said they are now in the planning stage for the said international business venture.
“I think what you have to realize with geothermal investment unlike a natural gas power plant is its long gestation. From the time you explore to the time power is produced it will take about 6.5 years to seven years. As early as today we need to be planting those seeds. There are discussions ongoing in Indonesia, but nothing is being firmed up yet. We have a team in Indonesia. It’s still early days,” Tantoco said.
EDC has already set up a representative branch in Indonesia as part of the initial move to explore geothermal development business in that country.
EDC president and CEO Paul Aquino earlier said the formation of the branch is necessary for the company to intensify its operations in Indonesia. There are about 20,000 MW of untapped geothermal resources in Indonesia .
Aside from Indonesia, EDC is also looking at other investment opportunities in other countries in South Asia and the Middle East .
At present, EDC is awaiting the decision from Lihir Gold Ltd. to renew its drilling contract at least for another year in Papua New Guinea (PNG).
LGL, which is one of the leading gold producers in the Asia Pacific region, sources most of its power requirements for its gold mine and processing facility from geothermal energy.
EDC’s contracts with LGL have been its major source of drilling revenues since 1999.